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Tax Practitioners Board v Dedic

Tax Practitioners Board v Dedic

Case [2014] FCA 511 20 May 2014

Pecuniary Penalties

Deterrence

Compliance

Contraventions of Legislation

Specific Performance

Admissibility of Evidence

Civil Penalty

Taxation Law

Administrative Law

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FEDERAL COURT OF AUSTRALIA
Tax Practitioners Board v Dedic [2014] FCA 511

Citation: Tax Practitioners Board v Dedic [2014] FCA 511

Parties: TAX PRACTITIONERS BOARD v ZADA DEDIC

File number(s): VID 1028 of 2013

Judge(s): DAVIES J

Date of judgment: 20 May 2014

Catchwords: TAXATION – penalty hearing – contraventions of the Tax Agent Services Act 2009 (Cth) admitted in part – pecuniary penalties – appropriate for the applicant to make submissions as to penalties – penalties to be paid in instalments due to financial position of respondent

Legislation: Crimes Act 1914 (Cth) s 4AA
Tax Agent Services Act 2009 (Cth) ss 2-5 and 50-5(1)

Cases cited: Australian Communications and Media Authority v Clarity1 Pty Ltd (No 2) (2006) 155 FCR 377; [2006] FCA 1399
Australian Competition and Consumer Commission v EnergyAustralia Pty Ltd [2014] FCA 336
Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) (2005) 215 ALR 281
Australian Competition and Consumer Commission v Telstra Corporation Limited [2010] FCA 790
Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 88 ALJR 176; [2013] HCA 54
Barbaro v The Queen; Zirilli v The Queen (2014) 88 ALJR 372; [2014] HCA 2
Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285
Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20
Tax Practitioners Board v Campbell [2012] FCA 1153

Date of hearing: 5 May 2014

Place: Melbourne

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 10

Counsel for the Applicant: Mr D Star

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the Respondent: The respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1028 of 2013

BETWEEN:
TAX PRACTITIONERS BOARD
Applicant

AND:
ZADA DEDIC
Respondent

JUDGE:

DAVIES J

DATE OF ORDER:

20 MAY 2014

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.In respect of the 86 contraventions of the Tax Agent Services Act 2009 (Cth) declared by the Court on 31 March 2014, the respondent pay one pecuniary penalty in the amount of $43,000.
2.The respondent pay the pecuniary penalty to the Commissioner of Taxation on behalf of the Commonwealth of Australia, such penalty to be paid as follows:
2.1$8,600 on or before 30 June 2015;
2.2$8,600 on or before 30 June 2016;
2.3$8,600 on or before 30 June 2017;
2.4$8,600 on or before 30 June 2018;
2.5$8,600 on or before 30 June 2019.

3.The respondent has liberty to apply in respect of the extension of any of the times provided for payment of the pecuniary penalty by order 2 herein.
4.The respondent pay the applicant’s costs of and incidental to the proceeding from 1 April 2014, to be taxed in default of agreement.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Tax Practitioners Board v Dedic

Details

AGLC: Tax Practitioners Board v Dedic [2014] FCA 511
Case: [2014] FCA 511
Decision Date

CaseChat Overview and Summary

The case of Tax Practitioners Board v Dedic was heard in the Federal Court of Australia, where the Tax Practitioners Board, the applicant, sought to impose pecuniary penalties on Zada Dedic, the respondent, for 86 contraventions of the Tax Agent Services Act 2009. The contraventions involved Ms Dedic providing tax agent services without being a registered tax agent between July 2010 and October 2012. The court had already declared these contraventions and issued an injunction requiring Ms Dedic to comply with certain requirements before providing specified tax agent services for three years. The primary legal issue in the penalty hearing was whether the Tax Practitioners Board could submit its view on the appropriate range of penalties for the contraventions, following the High Court's decision in Barbaro v The Queen; Zirilli v The Queen. The court found that the principle of deterrence, which is a primary purpose for imposing a pecuniary penalty, supported the practice of regulators making submissions about the appropriate penalty amounts in civil penalty proceedings.

Davies J held that the Board could indeed make submissions about the appropriate penalty range, distinguishing between the roles of prosecutors in criminal proceedings and regulators in civil penalty proceedings. The court concluded that the primary purpose of imposing a pecuniary penalty is deterrence, and accepted that the principle of deterrence justified the Board's submissions on penalty amounts. The court fixed a penalty of $500 for each of the 86 contraventions, amounting to a total penalty of $43,000, considering Ms Dedic's limited capacity to pay but emphasizing the importance of an appropriate deterrent penalty. The court also ordered that the penalty be paid in instalments due to Ms Dedic's financial position and allowed her the liberty to apply to vary the payment dates on good reason. Additionally, Ms Dedic was ordered to pay the Board's costs of the hearing.

The court's decision underscores the importance of deterrence in setting penalties for contraventions of the Tax Agent Services Act 2009 and recognises the distinct roles of regulators in civil penalty proceedings compared to prosecutors in criminal proceedings. The outcome reflects a balanced approach, considering both the deterrent effect of the penalty and the respondent's financial circumstances.

Orders